GAO report recommends SURE disaster program changes to reduce potential fraud
By Jon H. Harsch
© Copyright Agri-Pulse Communications, Inc.
Washington, June 4 – The $7 billion in ad hoc crop disaster program payments made from 2001 to 2007 may have included up to $395 million in improper payments to “8,463 farmers who [USDA’s Risk Management Agency] identified as having received suspicious crop insurance claims payments in those same years.”
That’s according to a June 4 report from the U.S. Government Accountability Office (GAO). The report recommends new procedures at USDA to reduce opportunities for fraud in the Supplemental Revenue Assistance Payments Program (SURE) program created by the ’08 Farm Bill. One key change would be to notify FSA county officials “at the time of crop insurance claims for disaster-related losses so those officials have an opportunity to verify that crop disaster payment applicants experienced losses because of an eligible cause.”
Last year, House Budget Committee Ranking Member Paul Ryan (R-WI) and Rep. Jeff Flake (R-AZ) raised concerns about possible problems with USDA’s crop disaster programs. In response to the congressmen, GAO conducted an intensive study of past disaster payments to identify problems.
The GAO report on “USDA Crop Disaster Programs: Lessons Learned Can Improve Implementation of New Crop Assistance Program” lists a number of problems with incompatible and incompletely documented data systems used by USDA’s Farm Service Agency (FSA) to calculate disaster program payments from 2001 to 2007. GAO concludes that “Under past crop disaster programs, FSA’s automated payment system used information in multiple data systems to calculate and issue payments. However, we identified limitations in this payment system that prevented us from making a determination about the reliability of FSA’s data files.”
GAO notes that its investigation and previous reports including one from USDA’s Office of Inspector General last August confirm that “FSA’s information technology systems, which date to the 1980s, do not fully meet the agency’s business needs or readily share data.” That’s a view apparently shared by the FSA’s boss, Farm and Foreign Agricultural Services Under Secretary Jim Miller.
Commenting on the GAO report, Miller acknowledged that “confusion was encountered by GAO when trying to interpret the internal indicators and values in the files to determine if the calculation was for single or multiple market crops; yield based crops; value loss crops; quality adjustments, or whether the 95% Cap reductions applied to the pay crop.” He added that “FSA agrees the internal coding of the data files used to determine these conditions was difficult to understand.”
Responding further, Miller commented that FSA provided GAO with all systems documentation. But in response to Miller’s response, GAO concluded that “we stand by our statement that FSA officials could not provide systems documentation, such as specifications and business rules on how FSA used data in its systems to calculate crop disaster payments.”
Based on problems it identified with past disaster payments, GAO recommends:
- “To better ensure that payments under the Supplemental Revenue Assistance Payments Program compensate farmers who experienced eligible crop losses, we recommend that the Secretary of Agriculture implement procedures so that FSA county officials are notified at the time of crop insurance claims for disaster-related losses so those officials have an opportunity to verify that crop disaster payment applicants experienced losses because of an eligible cause.”
- “To ensure that crop disaster payments under the Supplemental Revenue Assistance Payments Program can be assessed as to whether they comply with relevant statutes and regulations, we recommend that the Secretary of Agriculture direct the Administrator of the Farm Service Agency to:
· “develop and maintain data system documentation, including written business rules, of the interim payment system and the final automated payment system that are used to calculate and issue crop disaster payments; and”
· “develop and implement a mechanism to link Web-based payments to the application data in the spreadsheets maintained in the FSA county offices that would result in an integrated interim payment system.”
To
read the 53-page GAO report released June 4 on “USDA Crop Disaster Programs:
Lessons Learned Can Improve Implementation of New Crop Assistance Program,” go
to:
www.gao.gov/cgi-bin/getrpt?GAO-10-548
For one-page highlights, go to: www.gao.gov/highlights/d10548high.pdf
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